Replies to LegCo questions
LCQ14: Self-financed drugs
Following is a question by the Hon Andrew Cheng and a written reply by the
Secretary for Food and Health, Dr York Chow, in the Legislative Council today
(May 12):
Question:
It has been recently reported that some pharmacies have substantially raised the
prices of certain drugs, which has resulted in the increase in the burden of
drug expenses on patients who need to take for long periods self-financed drugs
prescribed by public hospitals and clinics under the Hospital Authority (HA),
and some of the patients have been forced to reduce the frequency of taking
drug, so as to relieve their burden. In this connection, will the Government
inform this Council whether:
(a) it knows the number and percentage of patients who had been prescribed
self-financed drugs by public hospitals and clinics under HA last year and,
among such patients:
(i) the respective percentages of those who had been prescribed special drugs,
drugs with safety net and drugs without safety net;
(ii) the number of those who are chronically ill; and
(iii) the number of those who purchased self-financed drugs through HA and the
expenses concerned;
(b) it knows the difference between the average price and the average cost of
self-financed drugs provided by HA last year; of the profit derived by HA and
how the profit was used; whether HA had increased the prices of self-financed
drugs it provided last year; if so, details of the increase; if not, the reasons
for that; and
(c) the authorities had collected information to track the increases in drug
prices in the private market last year; whether it knows if HA will relax the
limits on income and assets for applications to the Samaritan Fund for subsidies
in response to the increases in drug prices, so as to relieve the burden on
patients of purchasing self-financed drugs and prevent them from falling into
poverty because of illness?
Reply:
President,
The Drug Formulary (the Formulary) has been implemented by the Hospital
Authority (HA) in public hospitals and clinics since 2005. The main objective is
to ensure equitable access by patients to cost-effective drugs of proven safety
and efficacy through standardisation of the drug policy and drug utilisation in
all HA hospitals and clinics.
At present, there are about 1,300 standard drugs in the Formulary. They can be
classified into two categories, namely general drugs and special drugs. General
drugs constitute around 80% of all standard drugs. These drugs have
well-established clinical indications and effectiveness and are available for
general use. HA charges standard fees and charges when providing these drugs.
Special drugs constitute around 20% of all standard drugs. These drugs are to be
used under specified clinical conditions with specific authorisation by
specialist doctors. Patients who meet the specified clinical conditions and are
prescribed with special drugs will be provided with the drugs at standard fees
and charges by HA. For patients who do not meet the specified clinical
conditions but choose to use specific special drugs, they may still be
prescribed with such drugs after passing the assessment by doctors and they
would have to pay for the drugs as self-financed items.
Having regard to the considerations of evidence-based medical practice, targeted
subsidy and opportunity cost, patients have to purchase those drugs which are
not standard drugs in the Formulary at their own expense. These self-financed
drugs can be classified into drugs covered by the safety net and drugs not
covered by the safety net. Drugs covered by safety net are those proven to be of
significant benefits but with significant cost burden for HA to provide.
Patients who need these drugs and can afford the costs have to purchase the
drugs at their own expense. Meanwhile, we provide a safety net through the
Samaritan Fund to subsidise the drug expenses of patients who need the drugs but
have financial difficulties. Drugs not covered by the safety net include drugs
which have preliminary medical evidence only; drugs with marginal benefits over
available alternatives but at significantly higher costs; and life-style related
drugs (e.g. weight-loss drugs). Patients have to purchase drugs not covered by
the safety net at their own expense.
The reply to various parts of the question is as follows:
(a) In 2008-09, HA prescribed self-financed drugs to about 90,000 patients,
around 3% of the total number of patients in HA. We do not yet have the
information for 2009-10.
In 2009-10, a total of 39,385 patients purchased self-financed drugs through
public hospitals. The total drug expenditure involved was $752 million. Among
these drugs, special drugs (prescribed under conditions which are beyond the
specified clinical conditions) accounted for 57%, self-financed drugs covered by
the safety net accounted for 8% and self-financed drugs not covered by the
safety net accounted for 35%. As at December 31, 2009, a total of 742 HA
patients were subsidised by the Samaritan Fund for using self-financed drugs
covered by the safety net. The expenditure involved was about $70 million.
HA has not compiled statistics on the number of chronic patients who purchased
drugs at their own expense. Basically, chronic patients can receive appropriate
treatment with general drugs and special drugs provided by HA at standard fees
and charges which are highly subsidised. Nevertheless, under suitable clinical
conditions, individual patients may also choose other feasible treatment
options, including using self-financed drugs for treatment.
(b) At present, HA supplies three categories of self-financed drugs for purchase
by patients. These include items not easily accessible in the community
pharmacies, items covered by the safety net, and items that need to be supplied
for operational convenience (e.g. injection drugs).
HA provides self-financed drugs to patients at cost. The at-cost price includes
the cost of the drug itself, which is determined by the average price at which
various hospitals purchase the drug each month; and the administrative cost in
handling the drug, with the dispensing charge for each drug item set at $50 at
present. HA does not make any profit in supplying self-financed drugs.
The contractual purchase price of each drug will be adjusted upwards or
downwards from time to time in the light of market conditions. It is difficult
for HA to generalise the changes in drug prices in the past year.
(c) HA makes bulk purchases of drugs through contract and provides drugs to
patients at standard fees and charges or at cost. It has not collected
information on the sale and price movements of drugs in the private market.
HA uses the Samaritan Fund as a safety net to provide full or partial drug
subsidies to patients who have financial difficulties in paying the drug
expenses and require the use of specific drugs which are proved to be of
significant benefits but not covered by HA's standard fees and charges. With
subsidy under the Samaritan Fund, patients' contribution to the drug expenses is
fixed as a proportion of their disposable financial resources and the proportion
is capped at 30%. This is to ensure that patients can largely maintain their
quality of life even if they have to purchase more expensive drugs for
treatment.
In determining the level of contribution by patients to drug expenses, the Fund
looks at their annual disposable financial resources as an indicator in
considering their affordability. The amount of annual disposable financial
resources of patients is derived by deducting the allowable deductions from
their annual household gross income and adding the household disposable capital.
Personal allowance is one of the allowable deductions. The amount is adjusted
once a year based on the Consumer Price Index (A) and further adjusted once
every five years based on the results of the latest household expenditure survey
conducted by the Census and Statistics Department of the Government. This
calculation model and the corresponding adjustments help us take the impact of
rising prices on the living expenses of patients into consideration when
assessing their affordability.
Ends/Wednesday, May 12, 2010
Issued at HKT 15:16
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